ADT reported higher third-quarter revenue and GAAP earnings, alongside mixed cash-flow results. It also highlighted year-to-date cash generation and shareholder returns as it prepares for a proposed sale to Thrive Holdings, which would take the security and smart-home company private.
The acquisition agreement, announced Oct. 29, calls for shareholders to receive $10 per share in cash. Until the deal closes, ADT says it will continue operating independently; it has withdrawn its financial guidance while the transaction is pending.
Third-quarter results
- Revenue rose 4% to $1.3 billion compared with the same quarter last year.
- GAAP income from continuing operations increased $9 million to $153 million, or 20 cents per diluted share. GAAP earnings per share rose 18%.
- Adjusted income from continuing operations was $176 million, or 24 cents per diluted share, down $11 million. The company separately reported that adjusted EPS increased 4% year over year.
- Quarterly cash flow was mixed. Cash from operating activities was $440 million, down $40 million. Adjusted free cash flow, including interest-rate swaps, was $217 million, up $8 million.
- Year-to-date cash generation was stronger: operating cash flow through September was up 16%, while adjusted free cash flow including swaps was up 46%.
- ADT returned $748 million to shareholders year to date through share repurchases and dividends.
- Core operating measures included $360 million in recurring monthly revenue at quarter-end, gross revenue attrition of 13.1% and a revenue payback period of 2.3 years.
Proposed sale to Thrive Holdings
- Thrive Holdings has agreed to buy ADT in an all-cash transaction at $10 per share. ADT’s board unanimously approved the agreement.
- The deal is expected to close in the first quarter of 2027, subject to shareholder approval, U.S. antitrust approval and other customary closing conditions.
- If completed, ADT will become privately held and its shares will stop trading on the New York Stock Exchange. Until then, it will remain a public company and operate independently.
- ADT has withdrawn its previously issued financial guidance and is not providing new guidance while the transaction is pending.
Business priorities
ADT said it is investing in artificial intelligence, next-generation sensing technology, and expanded digital and retail distribution as it works to develop a more connected platform. Recent initiatives include Unusual Activity Alerts in its ADT+ app, which use connected-device and sensor data to flag meaningful changes in household activity. The company also cited progress on AI-powered presence sensing and development of potential security and aging-in-place uses.
What changes for investors: The proposed $10-per-share cash purchase would replace public-market ownership with a cash payout if the deal closes. Until then, ADT remains publicly traded, and its operating results and cash returns continue to provide a view of the business, but the company has withdrawn its financial guidance during the pending transaction.